Monarch expects to return to profit this year
Monarch Group is expecting to return to profit this year after hitting all its targets on revenue and costs in the first 100 days trading since a major restructuring last year.
The group changed hands last October when Greybull Capital LLP injected significant new capital and took a 90% stake in the 47-year-old company.
Under the new ownership, Monarch outlined plans to cut £200 million in annual costs out of the business as part of a major overhaul.
It decided to:
– Stop charter and long-haul flying from summer 2015
– Revise its network focusing on scheduled European short-haul leisure destination
– Cut its fleet from 42 to 34 aircraft
– Close operations from East Midlands from summer 2015 and instead focus on five UK airport bases – Gatwick, Luton, Birmingham, Manchester and Leeds-Bradford
– Form a new senior Executive Committee with Barry Nightingale recently appointed as the Group’s CFO.
– Revise agreements with aircraft lessors including the return of 10 aircraft from the current fleet
– Confirm orders for 30 new Boeing 737 MAX 8 aircraft with options for growth
– Implement a new agreement with the employees (which more than 90% of unionised staff voted to accept).
In addition, during 2015 Monarch stands to benefit from the drop in jet fuel prices, having un-hedged its position in September last year.
The airline says it is on track to reduce winter losses by around £20 million.
Chief executive Andrew Swaffield, said: "There is much to be done, but we now have a business with much lower costs, a solid platform for developing sustainable profitability and a clear strategic focus.
"The restructuring process was painful for everyone and I would like to say a big thank you to all of our colleagues who have remained focused on delivering great service to our customers throughout this period.
"Our aim is for all our people to share in the future success of the business. We must also acknowledge the support from our many industry partners, without whom the restructure would not have been possible."
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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